Pre Session Market - June 3, 2008

The Indian Market is likely to open in negative zone on the back of weak cues from the global markets as US markets closed in red and Asian markets are trading in negative. On Monday, Indian market closed with heavy losses after giving up its initial gains due to the heavy selling pressures led by the weak opening of the European markets. The domestic market opened with positive sentiment but was unable to sustain the momentum after the mid session and slipped sharply to close in deep red on the back of fuel price worries. According to the prime minister, government is not getting any way other than increasing the price of fuel due to soaring price of crude oil in the global market. This statement is indicating imminent increase in fuel prices. From the sectoral front, the metal and capital goods stocks were not in favour. Realty, banking and oil & gas stocks also contributed in increasing the pressure. The BSE Sensex closed lower by 352.39 points at 16,063.18 and NSE Nifty fell by 130.90 points to close at 4,739.60. We expect that the market may remain cautious as it may decline further during the trading session.

The Indian rupee climbed to a two-week high of 42.40/41 a dollar on Monday on the back of a statement of the RBI that it would provide foreign exchange to oil refiners which in turn will reduce dollar demand in the currency market. It had closed at 42.46/47 a dollar on Friday.

On Monday, the US market was closed in red due to concerns of more write downs as Standard & Poor''s Ratings Services on Monday lowered its ratings on Lehman Brothers Inc., Merrill Lynch & Co. Inc. and Morgan Stanley. This was because of concerns about further write-downs in their holdings of U.S. mortgage and residential construction loans. The Dow Jones Industrial Average (DJIA) closed lower by 134.50 points at 12,503.82 along with NASDAQ went down by 31.13 points to close at 2,491.53 and S&P 500 dropped by 14.71 points to close at 1,385.67.

Major Indian ADRS closed on low note as in technology sector, Satyam dropped by (3.64%) along with Infosys by (2.73%), Wipro by (2.33%) and Patni Computers by (1.37%). In banking sector, ICICI bank and HDFC bank decreased by (6.20%) and (5.39%) respectively. In telecommunication sector, MTNL advanced by (13.83%) while Tata Communication decreased by (2.84%). Sterlite industries went down by (1.54%).

Today the major stock markets in Asia are trading negative. Hang Seng is trading down by 370.25 points at 24,461.11 along with Japan''s Nikkei dropped by 218.35 points at 14,221.79 and Taiwan Weighted Index is trading at 8,651.14 lower by 73.33 points.

The FIIs on Monday stood as net buyer in equity. The gross equity purchased was Rs4,215.20 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs3,960.60 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was Rs254.60 Crore and net debt was Rs0.00 Crore.

Today, Nifty has support at 4,541 and resistance at 4,756 and BSE Sensex has support at 15,422 and resistance at 16,154.